President Trump's Tariffs: A Blow to India's Economy

Chief Economic Adviser V. Anantha Nageswaran warns that President Donald Trump's 50% tariffs on India could diminish its GDP by 0.5% this year. The tariffs mainly impact India's exports to the U.S., creating opportunities for competitors like Vietnam. Despite challenges, India's growth forecast remains stable.

U.S. President Donald Trump's decision to impose a 50% tariff on Indian goods threatens to reduce India's gross domestic product by half a percent this year, according to Chief Economic Adviser V. Anantha Nageswaran. He noted that the prolonged tariffs could lead to a GDP impact of around 0.5% to 0.6%.

The move, aimed at pressuring India over its oil imports from Russia, has effectively doubled tariffs on imports from India, potentially weakening trade between the two countries. Finance Minister Nirmala Sitharaman maintains that India will continue to purchase Russian oil due to its economic benefits.

Trade data shows a $45.8 billion U.S. trade deficit, with U.S.-India goods trade totaling $129 billion in 2024. As tariffs threaten 55% of India's $87 billion U.S. export market, competitors like Vietnam may gain a competitive edge. Still, India holds firm on its 6.3-6.8% growth forecast for 2026.

(With inputs from agencies.)